tv Nightly Business Report PBS January 20, 2010 6:30pm-7:00pm EST
>> tom: a ga changing election in massachusetts shis the balance of power in washingt and slows the drum beat of health carreform. remember, the bl we passed in the senate is good r a year. there are many differenthings that we n do to move forward health care, but we're not maki any of those decisions now. >> susiea look tonight at ere health care reform goes from here. u're watching "nightly busine report" for wednesday, nuary 20. is is "nightly business report" with sie gharib and tom dson. "nightlyusiness report" is made possible by:
this progr was made possible by contributions to yourbs station from viewers like yo thank you. >> tom: od evening everyone. the prognosis fohealth care refo looks grim. >> susie: tom, the dayfter a big republican sate win in massacsetts, washington re- inks the push for a comprehensive overhaul tom: our coverage tonight begins with th senate health care bill. as darren gersh reports,ven democric lawmakers are pushing to slow down now that vote in the deepest of the be states are seeing red. >>eporter: asked point blank if he would sticby the senate alth care bill, senate majority leader harry reid seemed to blink. >> i aconfident that health
cares an issue in this country and we areoing to do everythinge can to alleviate the pain and sufferi of people who can't afford health ca and who want to intain what they have. >> reporter: reid and esident obama agreed they woulnot act until the man who signs autographs as umber 41" actually takes office. for hipart, massachusetts senator-elect scott brn, argues it is time start over. >> is just a question of whether we are going to ise taxes, we're going to cut a lf a trillion from medicarewe're going to afft veterans care. i think we can do better reporter: in an interview with abcews, the president sa it was time to come together around the ements of health care refo people can agree on. but white house spokesn robert gibbs would not s exactly wh that meant. >>here are a lot of paths forward d we'll get an portunity in the coming hour and da to know exactly what th path is. >> reporr: it's not just health care, t path forward on controversial issues like climate change noweems blocke even many democratare agreeing
with republican stragist david winston that if they don focus on jobs, they might not keep thrs. >> if decrats can lose in massachusett they can pretty much lose anywhere and iould suggt that probably every decrat is nervous right now. >> repter: for a year, democratic leaders havargued voters wouldunish them if they tried, but faid to pass health care rorm. w the president and his part will have decide if that's stl true. darren gersh, "nightly busess report",ashington. >> susie: my guest tonightays health care bill will be passed in congress, ansoon. he's stuart sweet,resident of capitol analysts netrk, a washgton firm that advises wall street firms. hi, good to see you. >> thanks for inviting m >> susie: you heard our report tt darren st did, sound like there a some ubts out there. yet you're so positive. tell us y. i wod think that a lot of the democtic lawmakers are going back talking to their cotituents andaybe rethinking, do they havehe votes. >> well, theyertainly do
have the votes both bills, the bl in the house and sete are 85% the same. there are many provisions in the bill thaare popular. but this is a large bp in the road. the democratic party willome together. i remembe what a wise man from pennsylvania oncesaid, benjamin franklin, we either hang togher or we hang separately that's what they said as they signed the declarationf independence. the democrats are in a similar position. they will hang togethe they will produce a bill,t will be more popular an it is today and it will lead the headlines. susie: let's talkhat kind of bill it mighte. when they'rell sitting around the table,the guys from theouse and senate, willt be a watered down verse? with a kind of opons are on the table? >> well, ihink it will be similar the bill that passed botbodies. it going to recover probably 28, 30 million uninsured amerans. it's goingo offer guaranteed insurance to anybody who doesn't have it. d it will iminate lifetime caps onbenefits, eliminate
annual limits on benefits. it will make progress on eliminating the so-call gap in the migap coverageand the doan you hole, it wil help seniors. many provisions are going to be popular. >> susie: but what about respding to the voters' messe that came from ssachusettshich was, the example of theassachusetts miracle was alway auccess ory for health care. isn't that chaing the debate at all? >> oh, certainly. but part of th is also just tactical campaigni. scott brownan by magnifint campaign. it wilbe studied by the experts for years, an frankly his opponentan a or campaign. i read the message moreof one on angst about the economy and the pact tt president obama took offe where unemployment was 7.6%, it's 10% now and ere's a sense that washington is not paying attention to the issu they care most about which is jobs, and secondlyhe deficit. next week this is all goingto ange. a week fro today president obama will be giving a state
of the union address, i think he'll be talking a greateal about hisobs package, that has already passed, a version has alreadyassed the house and ued senate aion. eleven days from no they'll be talking abo the budget, he'll be ling out h we're going to cut th deficit and get the country ving again. >> susie: a lot o investors are tryingo figure out what this new develment on health care means for the portlio. so for tse who he health care stocks, buy,ell orold, what are you tling your clients? >> well, what i tell investors on the maned care stocks, this i a false rally they out to take the give that was given to them yesterday a ll. managed care companies, ralld on the news of a probab scott brownictory. on my judgment ey're going to retreat once it becomes clear th a bill isgoing to pass. >> sus: whatbout other health care stocks, whether they'r the phaa stocks, insuranccompanies, hospital stocks? >> well, pharma i think als wi retreat. there was asmaller rally in
arma yesterday. i think for the same reasons that the managed choir and -- care and insurance companies will go down. we recommend selling hospitals are beneficiaries of thispproach. they havelarge bad dts, which they shednder the bill. so you actually s hospital stocks sell off som on the fear at a bill woul not go through. they will rally as it becomes clear that yes indeed that the insurers will be declined. susie: thank you so much fogiving us your thougs tonit. thank you. >>usie: we've been speaking with stuar sweet,resident of capital analyst twork. >> tom: herere the stories in tonight's "nbr newswheel the blue chips took their biggest one-day dr so far this year as china tightened its monetary policy, raising new worries about demand for mmodities-based stocks. the dow fell 1 points, the nasdaqost 29 points, and the s&p 500 lost 12. goog and youtube are teaming
to take on rival netflix, t companies will sta testing a w video rental service frida it's youtube'sirst try at delivering paid content. and eaking of, the new york times hos new fees for using its website will makup for a big drop in ad revenue starting next year, sitors to times.com will get a limited number of arcles free every month. then, they'll be aed to pay a fl fee for everything else. >> susie: no me sticker shock r berkshire hathway stock. at 9:30 a.m. easternime tomorrow, here at the new rk stock exchange, investorcan buy warren buftt's class b shares f about $70 each. that a lot more attractive than today's $3,000-us icetag. rkshire shareholders voted y today split those class b shares 5to one. suzannpratt looks at whether the split really makes a differen. >> reporr: it's now a lot cheaper to own piece of warren ffett. today's stock split sets t stage foberkshire hathaway's planned purcse of railroad
ant burlington northern. but, t split is also likely to attract new invests to the oracle of omaha,articularly those previously put o by his company's lofty stk price. berkshire haway's class b shares a already a top holding for the wiergreen fund, run by david winters. >> people for some reason dot wa to buy a stock at $3,000. but th are willing to pay $70 for a stock. it m in fact attract more buye and berkshire could go up because of it. it doesn't make sense, but i may happen. >>eporter: the lower price should increase tradinvolume, anthat in turn may make it eligible for the exclusive s 500 inx. once iluded, index funds would then be foed to buy the stock. but, morngstar analyst bill rgman says the anticipated p for rkshire is not enough of a reason to buin. >> that's already the market pricfor berkshire hathaway. the ings that really matter,
stock splits normalldon't matt that much, going into the p 500 that's an interesting develoent. but,hat really matters for berkire hathaway is the long- ruviability of its business model. >>eporter: many experts say the berkshire business model gets brighter day as the u.s. recovery pks up steam. that's becau the conglomerate is in so many onomically sensitive businesses. >> they sell things like ss cay and paint, benjamin moore paint. the basics, the fabr of our lives. so, as i think theconomy improves and with e split, the stk should go up a lot. >> reporter: but, there's ill one more big issueor berkshire hathaway's stock. buffett is still mum aboutho will replace him if hever retires. suzanne pratt, "nightly siness report new york. >> tom: ill ahead, tonight's "seet critique" guest is looking at big screens a small stks. he's jim oberweis, presint of oberweis asset manement and he'll explain.
>> susie: housinregulators anunced new plans today to tighten their lending standas. e federal housing adnistration hopes the move will protectaxpayers and support the hoing market. sthanie dhue explains. >> reporr: the fha is a key play in the mortgage market, insuring about a trd of all nemortgages. a commissioner david stevens says the tighter lding standards are signifant, but not overwhming for most borrowers. >> this will help get the capital reserves bacup, if the market stumbles further, whi we don't expect, we can alys be prepared to change, but tse e important moves because it needs to get fha back onrack, t keep the housing market
supported and funconing at a ti most critical to this economic recery. >> reporter: beginni this summer, borrowers wi a credit score lower than 580ill have to put down at least 10% higher credit scoresill still qualify for the fha'3.5% down payment ogram. fha home buys will also be limited how much money they can get fromellers toward closing sts, dropping from 6% to 3% of the purche price. anif congress approves, borrers will have to pay 0.5% more for insurce premiums. john courson of e mortgage bankers associatiosays the changes wot impact many rrowers. many of our members have alrey tightened their lending standards above the that had been in ace for fha. so my of those changes won't a new effect on borrowers because they've beenut there in the marketpce over recent months. >> reporr: critics say the changes will do ttle to reduce the agency's risk. buanalyst karen petrou says the move is a nessary first ep to keep taxpayers from picking up another bigab.
>> as a governmentgency, the fha is still lending io a headwind, so we have a coue of moving pies here, one is fixing fha, but more impornt stl is fixing the mortgage market and f can't recover until it does. >> repter: analysts expect the fha will do more tigening of its nding standards as the housing rket improves. at way the government can begin to sp back, and let the prive sector step in and take so of the risk. stephae dhue, "nightly buness report", washington. >> susie: you n watch sthanie's entire interview withha commissioner david stevens on oureb site, nbr on pbs.org. it was earnings,arnings and morearnings, and you've been an licing those numbers. >> to absolutely, lots of earnings aer the bell as well, so t's take a look at that market cus this eving. >> tom: the earnings pare is
picking up pace with ebay an stbucks both out after the cling bell. ebay continues the tnd of betterhan expected profits. its urth quarter coming in with a 44 cent perhare profit, fourents over expectations and an improment from a year ago. it's earnis guidance for the full year is morthan analyst predictions. ebay stock sold f ahead of the earnings cal down to its lowest price since septeer but the stocwas up about 8% in after hours. starbucks earnings ao heated upcoming in five cents better than estimates and a big jum compared to a year ago sales at stores open forore than a year were up 4% andhe company raised its 2010 idance. starbucks stock poppeds much as 3% after hours. a move over $24 uld be a new -week high. the compy plans to open 100 w stores in the u.s. and 200 overse this year. as we pointed t last week, investors ha tended to sell stock after even decen earnings. today, a day aft ibm's better th expected earnings report, big blue stockas the worst performingtock of the dow industrials. weentioned coach last night. beating expeations wasn't enough.
the stochitting one-month lows on fivtimes average volume. rail operatoc.s.x.aw a similar reacon, dropping to a ten-week low deste a rise in profits. revee was a disappointment. a trio of big banks so saw selling today their earnings. bank of america and wes fargo bo saw improvements in the fourth quarter. b of aas able to buck the selling today. but not lls fargo and morgan stanley. moan's results missed expectations. separately, trust banks std out in the financial secr, finding burs as earnings are comi in better than expected. bank of neyork mellon, state stet, and northern trust all saw ock gains. financial results were helpeby manageme fees. ese banks focus on financial custody and processing inste of the more familiar ban lending busine model. plenty of earnings tomrow, incling the best performing dow stock ofast year, american
express. ahead of its fouh quarter, a.x.p. sto hit a 52-week high today befo seeing a little prit-taking. goldman sachs also ion the calend. expectations have beenialed back over slower fouh quarter trading operations. and google comes in after e close. since the beginning this year, google sto is down 6%. what's the app for dra? business week repos apple may drop google the go-to ternet search engine on the iphone. instead, apple may use miosoft's bing search engine. the magazine says crosoft and apple ha been talking for weeks. apple stock is just low its most recent 52-week high. and there's ts of news swirling around ape. beyondhe microsoft iphone search talks, the is the expected unvling of an apple tablet next week. one analyst speculates it wi be like a super ipod morthan a full-blown tablet couter. new iphoneodels also are a possibility.
should the long-rumored blet become a reality, may prove to be the iffest competition yet to amazon's ndle. the electronic book was huge hit for amazon over the hodays and as a preempte strike, amaz is offering authors and publishers higher royaltieon discount books since hittina new split adjued all-time high in cember, amazon stock has trended wer. and that's tonight's "mark focus". >> tom: tonight's stet critique guestooking for me big moves fro small
stocks. he is jim oberweis o oberweis ast management, joining from chicago tonight. ce to see you n. b. r. here. when you're lookg at the small cap environme, big rallin 2009. what's the environmentthis year? >> we're optimisc that 2010 could also be a goodyear for small caps o reasons. one tre's a loof money still sitting arnd, as ras t going, we expect some of that to to equies. antwo, small caps are probably the equitiesf choice. they he the nimbleness to avoid some of the stagnation that i think will affect lae cap companies. >> tom: you did bring a trio of stock ideas th evening, begiing with imax, the giant movie screen company, imax. certainly aice giant moven e stock price over the pt 12 months. avatar perhaps what most folks are mos know worthy when it comes to imax. how much of that is priced intohe stock already? >>vatar will be a big plus in the short run. and d as a whole over th
longer term. but what' driving is th econics of digital fm, which reduces costs to distributing movies to the individual theaters. tom: going to the big screen from nano technology with yourext pick. real an astronomical price rise, 780% return otr the 12 mont of the chart we're looking at from about a dollar to $11 and change. could is possibly have any mo room to run? >> se, because i thk rnings will also have a long way to run yet. for the last couple yearswe saw significanteclines in capital spending, on semiconductor capital equipment. that's epanding, they have theechnology which is required for very, very small fast chips tmake sure that they're working prorly. we expect the order ptern to be very positive over the course of the next couple years. >>om: in december the company did a secondary offering of two million shares. any coern about dilution there? >> no, not when you apply the capital in anishl manner. was one of the buyers of that. >> tom: okay fair enoug, at
$11 a share. a canadian company that makes oad band networ equipment, wireless, a three-month chart here n. the last quarter, as you're are, 82% of ses ca from one single stomer. >> web that customer explod from zero. it clear wire and they're building out the fastest next generationetwork and using all dragon wave technology. we thi you'll e announcements fromt&t and verin, and we think that hers will adopt their techlogy to incase band widttransmission. we likit. >> tom: as you're buyinon e hopes ofiversification, whatould happe if you're not seeing that, what kindf time frame are you looking at? >> the next 12 months. >> tom: any disclosures with these stocks you mentioned tonight? >> se, we own all of them in our funds ani'm shareholder ofur funds. >> tom: all right r street critique guest, j
oberweisfoberweis asset managent. >> susie: here'shat we're watching for torrow. we'll see the weeklyumbers on jobls claim benefits and crude and gasoli inventories. and the conference boards out with i leading indicators for december. so, tomorrow the business si of pnes, trains, and automobile quarrly results from contental airlines, burlington nohern santa fe, and for motor. >> susie: no one'smiling tonight atmall smiles, the chain of children'dental clinics reed to pay $24 llion to settle government charges of medicaid fraud. the department of health a human services ss forba, the holding company th runs small smiles, profited from so-cled baby root canals and oer tractions that were often medically unnessary. the govement's inspector generadaniel levinson said the clinics treatehalf a million low-income childn a year. >> cases like this onenvolving leged harm to vulnerable chilen, in addition to the
in the "money le" tonight, should you export your portfolio? here's jason zweig, rsonal finance columnist at the wl stet journal. >> should yoexport your investment portfolio last year, u.s. stocks bounc back over 26%. but foreigstocks rose more than 30%; stocks from thworld's emerging markets jumped9%. and over the past ten year as the u.s. stock mart lost an average of 1% nually, foreign stocks wt up by nearly 2% per year. bere you start shipping all your mon offshore, there's someing you should know. the hot returns on forei stocks have comeargely from the ll in value of the u.s. dollar. wh you invest overseas, you effectivelsell dollars to buy stock denomited in euros or pesos, yen oyuan. if those curncies then rise in value relative to the dollar
your foreign-denominated stockholdings will alsgo up. anthat's exactly what has been happening. rougy one-fifth of the return on foreign stocks overhe last ten years has come from the weaking of the dollar. buif the greenback goes up instead of down, your foign holdingsill be hurt. take away the change in the value the dollar over the past year, for example, and internatnal stocks would go from outrforming u.s. stocks by more than three perceage poin to under-performing by a full percentage poin of course,he dollar might continue to drop. and investing overas is a good idea. but ching the returns on foreign stks without realizing that you are betting agast the u.s. dollar is a bad idea. go overseas; just don't overboard. i'm jason zweig.